Taxable perks

[Supernick]

My new job will be paying for all of my commute, taking in the train and tube, and so will be buying me a quarterly pass 4 times a year. This will be worth approx. �3000 per year, and so I was wondering if anyone could explain the rules regarding declaring this to the taxman, and what I might expect to be taxed.

[Loosehead]

Well assuming you are travelling from your normal home to your normal place of work you will be taxed as if this is unearned income, ie it's effectively 3k on your salary and will be taxed as such. The amount depends what bands you are in/straddling.

[Supernick]

To be able to get 3k take home though, I'd have to be earning 5k, so would I be taxed as if I were earning 5k more?

[Loosehead]

No, they will declare it as a perk on your p11d or they will pay you it as part of salary, depends on how your firm works. Perks are not treated as what they would have to be to be net of tax, well not yet anyway!

[pagey]

Why would it not be treated as a business expense? ie no tax implications for employee and vat refund for company?

[Loosehead]

Because transport to and from your normal place of work is not deemed a business expense ( there are times when it can be, ok pedants, I know that)